MAS Flags Risks From Rising Corporate Debt

SINGAPORE - Singapore banks could see loan quality fall sharply should interest rates rise or if the economy worsens as corporate debt levels are high by historical standards, the city-state's central bank warned on Wednesday.

"Corporates are more leveraged today than they were a year ago as low borrowing costs may have prompted some corporates to borrow more than they would have otherwise," the Monetary Authority of Singapore (MAS) said in its annual Financial Stability Review.
Large firms have issued twice the amount of debt in the first nine months of this year compared with the same period last year, while loans to small- and medium-sized enterprises have continued to expand robustly, MAS added.

"If economic conditions worsen or interest rates rise from current low levels, bank loan quality could deteriorate substantially," the central bank said, although it added companies in the city-state appear well-positioned to cover their interest expenses.
Singapore interest rates are hovering near all-time lows amid a surge in inflows resulting from quantitative easing by Western central banks.

The yield on the 10-year government bond is around 1.36 per cent while bank deposits earn as little as 0.1 per cent per annum, well below inflation that has averaged 4.7 per cent so far this year.
MAS had a more benign view on household debt levels, noting Singapore's household net wealth stood at four times gross domestic product, an increase of 7.3 per cent from a year ago.

Total cash and deposits belonging to households have also continued to exceed aggregate debt, it added.
MAS said government measures since 2009 to pre-empt the formation of a bubble in Singapore's residential market has led to a "noticeable slowdown in the pace of housing loan growth".

Property-related loans, at 46 per cent of outstanding Singapore dollar loans to non-bank customers, is below the average of 48 per cent in the past eight years, it added. Nonetheless, the central bank said demand for private residential property has remained resilient despite the anti-speculation measures.
"The government will continue to monitor the market closely, and will not hesitate to step in, if and when necessary, to promote a stable and sustainable property market," it added.

NON-SINGAPORE DOLLAR LOANS

MAS's Financial Stability Review, which is published once a year, is aimed at highlighting how developments in global financial markets and Singapore could have an impact on the soundness and stability of the city-state's financial system.

In its assessment of the global financial environment, the Singapore central bank noted that investor sentiment has become more volatile over the past year, which has in turn led to volatile capital flows.

One likely scenario affecting Asia is that the continued accommodative monetary policy in advanced countries will drive more capital into the region, causing a further buildup of risks in the form of excessive leverage and asset bubbles.

But MAS also noted that Singapore banking system's funding profiles and asset quality were sound, and that local banking groups DBS Group, Oversea-Chinese Banking Corp and United Overseas Bank are well capitalised.

The central bank reiterated a warning about the risks arising from the growth of Singapore banks' foreign currency loans which have once again outpaced the increase in non-Singapore dollar denominated deposits.
"Non-Singapore dollar funding risk continues to warrant close monitoring. The growth of non-Singapore dollar loans outpaced the growth of non-Singapore dollar deposits in the past year. Hence, the non-Singapore dollar LTD (loans-to-deposit) ratio rose marginally from 124.0 per cent in Q3 2011 to 124.9 per cent in Q3 2012," the central bank said.

In its report last year, MAS had warned that banks in Singapore were taking a risk by giving out US dollar and other foreign currency-denominated loans and relying on financial markets rather than deposits to back these loans.

  AsiaOne Wednesday, Nov 28, 2012

Singapore Money Lenders going Tech Savvy With QR Codes

Singapore Money Lenders going Tech Savvy With QR Codes
With the new advertising rules and regulations for legal money lenders in Singapore which forbids them to advertise on the newspapers and mass media. Money lenders are going tech savvy.

QR Code (abbreviated from Quick Response Code) Invented in Japan by the Toyota subsidiary Denso Wave in 1994 to track vehicles during the manufacturing process, the QR Code is one of the most popular types of two-dimensional barcodes.

Two Legal Money Lenders in Singapore Are Using QR Code to provide convenience for their customers.

Mr Tan from Successful Credit mentions, “With the new rules and regulations, newspaper marketing has become a thing of the past and forbidden. We have to move more towards technology and upgrade our marketing efforts.”

Individuals in Singapore seeking short-term cash loans can now apply for a loan discreetly and conveniently. Just with a scan, fill in their particulars on the application form and the process for the loan will take place.

“We implement QR Code to make the process of application convenient for our customer, just scan and fill in the application, “ said Mr Neo from Budget Capital.

Applicants now need to merely scan and fill in the short online form with name, phone, address loan amount and occupation. The process will take within 24 hours or less, and applicants will be notified regarding their loan approval.

Once approved, applicants are required to head down to the branches with their proof of Singapore citizenship, their original IC and their current pay slip and the loan will be handed out in cash.

Will the idea of QR Code benefit Legal money lenders in Singapore? Will it be a boost in marketing efforts? And will consumers find it more convenient?

How to scan a QR code reader with your smart phone 1. You must first have a web-enabled, smart phone (one that can access the internet and have a camera function) 2. Go to your phone’s app store and search for “QR” or “QR readers.” Depending on your phone, there are a number of good ones. Look for the star ratings and read the reviews to decide which one is best for your phone. 3. Activate app, and scan the QR Code About Budget Capital

Budget Capital a legal money lender agency located at Queenstown in Singapore, that specializes in Low income loans. http://www.budgetcapital.com.sg
About Successful Credit

Successful Credit located at Arumugam Road, a legal money lender agency that provides customized loan packages for personal loan http://www.successfulcredit128.com

Understanding Hard Money Lending

In the world of finance, there are actually two terms connected with lending: hard money lending and soft money lending. Soft money loans are those with flexible payment schedule plans and borrower-friendly conditions; while hard money loans are usually those with relatively strict terms and payment schedule plans, and everything is totally up to the lender. Hard money lending is offered by both private and commercial lenders. Private lenders are usually affluent individuals who want to make some profit by lending their money to individuals they consider good payers/borrowers. Commercial lenders, on the other hand, are financing establishments that lend money as their business to people who wish to obtain a loan. It is usually real estate investors who need these kinds of loan because in their case, it becomes a win-win situation. The loan providers will get their profit from the money they put out, and the borrower will likely earn a quick profit from the property he or she chose to invest on, while being able to meet the payment schedule and terms of the lender. So basically, even though the terms and payment plan might be fairly strict and rigid, there are still many who go with this because this can be a quick approach to acquire finances. The minute your loan will get approved, you get the money right away. Given that with hard money lending most of them usually are private lenders, they'll have their very own specific requirements for the loan's approval. The real estate investor's expertise could be a key aspect impinging on the approval of the loan, however there are actually other criteria also. That is the reason why a good relationship with lenders is essential for real estate investors. Developing a strong relationship with them can be done because private hard money lenders are individuals, and as long as they have a good relationship, the borrower sees that when they see a good opportunity, he or she will have the required resources. Nevertheless, for those new to real estate investing, locating these individuals is probably not easy to achieve; although, they are usually looking for new opportunities to loan their money. Hence, if you're a newbie, keep your eyes and ears open for these. Just to get a concept concerning hard money lending, these are usually short-term loans starting from six months to five years, subject to the conditions of the loan provider; and the regulations used for each loan is usually from one half to three quarters of the property price along with the post repairs. In terms of the points, will probably be ranging between two to ten on top of the loan's sum. Yet again, these conditions depends on the lender - it's their call. On the other hand, it is known that when hard money loans are usually financed by private sources (individuals), the terms usually are sterner than commercial lenders. Albeit, once the investor has located the ideal loan company for his needs and vice versa, then hard money lending is unquestionably useful for both parties.